TMI Blog2020 (1) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... der cogent evidence to explain how the shares in an unknown company worth ₹ 5 had jumped to ₹ 485 in no time. The fantastic sale price was not at all possible as there was no economic or financial basis to justify the price rise. It was held that the assessee had indulged in a dubious share transaction meant to account for the undisclosed income in the garb of long term capital gain. The gain was accordingly held to be rightly assessed as undisclosed income. Similar view has been taken by the Hon ble Delhi High Court in Suman Poddar vs. ITO [ 2019 (9) TMI 1089 - DELHI HIGH COURT] . In view of the foregoing discussion, accord imprimatur to the view adopted by the ld. first appellate authority on this score and accordingly cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the transaction of long term capital gain. The assessee tendered reply, which was considered by the AO. He found that the assessee purchased 2500 shares of PS IT I SL in physical form @ ₹ 40/- per share during the financial year 24.07.2013 for a consideration of ₹ 1,00,000/- through a broker, namely, Economy Sales Private Limited. Thereafter, PS IT I SL declared shares split in the ratio of 1:10. The assessee sold 25000 converted shares in the year under consideration, namely, 15,000 shares on 20-11-2014 @ ₹ 76.98 per share; 10,000 shares on 18-12-2014 at ₹ 90.14 per share. The AO reproduced extract of Balance sheet and Profit and loss account of the company from March 2011 to March 2015 for demonstrating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is in appeal against the confirmation of the addition. 4. I have heard the rival submissions and gone through the relevant material on record. It is found as an admitted position that the assessee purchased 2500 shares of PS IT I SL at ₹ 40/- per share on 24-07-2013 and after conversion in the ratio of 1:10, sold such shares in the year under consideration at an average sale price of more than ₹ 83/- per share. In other words, the converted share of this company purchased at mere ₹ 4/- was sold after a year and few months at close to ₹ 83/- per share, giving phenomenal increase in price of more than 20 times. The AO extracted the summary of the Profit and loss account and Balance sheet of PS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ife got the amount, apart from saying that it was sthridhan property, he failed to disclose any source from which his wife could have got the amount for purchasing the premises. In this backdrop of facts, the Hon'ble Supreme Court held that although the apparent must be considered as real, but, if there are reasons to believe that the apparent is not real, as is the case under consideration as well, then the apparent should be ignored to unearth the harsh reality. 6. Similar view has been canvassed in Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC). The question for consideration in that case was whether the assessee purchased winning tickets after the event. It was observed that in all cases in which a receipt is soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of its shares, for which an appropriate addition has rightly been made and upheld by the authorities below. My view is fortified by the judgment dated 10.4.2017 of the Hon ble jurisdictional Bombay High Court in Sanjay Bimalchand Jain vs. Pr. CIT in ITA 18/2017, which has been briefly referred to by the AO. The Hon ble High Court in that case has held that the assessee did not tender cogent evidence to explain how the shares in an unknown company worth ₹ 5 had jumped to ₹ 485 in no time. The fantastic sale price was not at all possible as there was no economic or financial basis to justify the price rise. It was held that the assessee had indulged in a dubious share transaction meant to account for the undisclosed income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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